A journal of diagonal parking in a parallel universe.

Menu

The Bogus Cost Of Carbon

In 2010, 12 government agencies working in conjunction with economists, lawyers and scientists, agreed to work out what they considered a coherent standard for establishing the social cost of carbon. The idea was that, in calculating the costs and benefits of pending policies and regulations, the Department of Transportation could not assume that a ton of emitted carbon dioxide imposed a $2 cost on society while the Environmental Protection Agency plugged 10 times that amount into its equations.

At the time I protested loudly that this was only half an analysis. Even the dumbest anthropoid knows if he is faced with a complex decision, to take a piece of paper, draw a vertical line down the middle, put “Pluses” at the top of one column, “Minuses” on top of the other, and fill in the columns with the pluses and minuses of the decision. He might put “Gains” and “Losses” at the top of the column, or he might put “Costs” and “Benefits”, it’s all the same.

What nobody does when faced with a complex decision is to take a piece of paper, put “Costs” at the top of the paper, and list all of the costs by themselves.

But that is exactly what the Obama Administration has done. They have devoted thousands of man-hours to the “Social cost of carbon”, but done nothing to determine the “Social Benefit of Carbon”. Yes, I know that as the NYT notes, they are supposed to use the “social cost of carbon” in a cost/benefit analysis, but that part just gets forgotten. In 2008, for example, the 9th U.S. Circuit Court of Appeals busted the National Highway Traffic Safety Administration because they failed to explicitly monetize climate benefits.

In my opinion, for the scientists involved, this is scientific malfeasance. For the bureaucrats involved, this is nothing but lying to the public. And they can’t claim ignorance. Nobody does just a “Cost” analysis, it’s called a “Cost/Benefit Analysis” for a reason.

Now, the Trump DOE Transition team, to their credit, asked who these miscreant DOE scientists and misguided bureaucrats were who were engaged in fooling the public. Following my maxim that “When a man hides something … it’s because he has something to hide“, the DOE foolishly refused to answer … as though the answer can’t be found in any one of a hundred public or internal documents, rec. It’s kids in the wheelhouse at DOE, that much is clear.

So … what to do about this? Well, here’s my suggestion. Trump should convene, what was it, oh, “12 government agencies working in conjunction with economists, lawyers and scientists” and ask them to “work out what they considered a coherent standard for establishing the social benefit of carbon”.

How about to start with, for the first benefit of carbon we include … development of the entire human race out of a pre-existing wretched short brutal life to the kind of lives we live today? Is that worth more than $30 per tonne?

Of course that would be turning their trick back on them. Notice that they are not discussing the social cost of carbon DIOXIDE. They know they can’t do that, it’s plant food. So they called it the cost of CARBON … and by doing so, they opened the door to legitimately include the fact that carbon-based fuels are what keep us from freezing and starving.

If people want to know the true “social cost of carbon”, that would be the cost of doing without it. How about we do without carbon-based fuels (gas, diesel, kerosene, Jet-A, coal) and carbon-fuel-based products (plastics, synthetics, fertilizers, medicines) globally for a month … it would sure put “Earth Hour” to shame, that one hour a year where guilty carboholics seek absolution from their sins of commission and sins of emission by turning their lights out for an hour. We could call it “Earth Month” … voluntary, of course, for all those who are convinced that the costs of carbon outweigh the benefits …

But even if we don’t turn their trick back on them, and we just have the 12 agencies discuss the social benefit of increased CO2, estimates are that the present increase in CO2 over pre-industrial times has increased plant growth by 10%. Here’s a discussion of NASA’s measurements of plant increases from CO2. Makes sense, commercial greenhouses use increased CO2 levels up to 1000 ppmv to greatly increase their plant production. Here’s Sherwood Idso’s graphic of trees grown at different CO2 concentrations.

Now, how much is 10% of the value of all the vegetables and crops grown worldwide? Because that is one undeniable benefit of increased CO2. FAO says agriculture is about 10 percent of global GDP, which is about $75 trillion, so call it $7.5 trillion worth of agriculture. To that we have to add the main form of agriculture worldwide, subsistence agriculture. Let call it ten trillion all up for the value of agriculture. Ten percent of that is a trillion bucks a year … that’s a huge benefit.

And remember, that’s a long-term benefit, not just a one-off. That’s a trillion bucks a year for the foreseeable future.

Not only that, but the poorest woman trying to feed her kids in Africa gets the benefits of increased atmospheric CO2, not just the rich. How cool is that? It’s the bizarre inverse of a “carbon tax”, which hits the poor the hardest … the benefits of CO2 are egalitarian, even the poor get more food.

Finally, the claim is often made (based on some scale going from zero to unicorns) that the “social cost of carbon” is $30 per tonne. The current amount of CO2 in the atmosphere is about 125 ppmv above the 1750 level . The conversion is 2.18 gigatonnes of carbon per ppmv of CO2. That’s about 273 billion tonnes of emitted CO2 in the atmosphere. In addition, some 40% of the emitted total is sequestered, that brings emissions up to 450 billion tonnes of CO2 At a claimed “cost of carbon” of $30 per tonne, that is $15 trillion dollars of claimed damages from CO2 … so … where are the corpses?

Seriously, folks. If the “social cost of carbon” is truly that astronomically high, where is the ongoing damage? Where are the supposed ills? Where are the sunken cities? Where are the horrible results? Where is there an accounting of the $15 trillion in claimed losses?

Anyhow … I do think that Trump ought to get twelve agencies and form a “working group” and tell them to produce the one true number to represent the social benefits of carbon … I’d do it just to see the talking heads explode.

Rainy morning, three and a half inches (90 mm) in this last storm. The hills are overjoyed, the plants are ecstatic, the animals … not so much.

Best to all, plants and animals alike,

w.

As Usual … If you disagree with someone, unlikely I know but it has happened on the web, please QUOTE THEIR EXACT WORDS THAT YOU OBJECT TO. That way we can see just exactly what you’re talking about.

[UPDATE 20 DEC 2016] From the Hoover Institute I find the following about the Social Cost of Carbon (SCC):

As all champions of cost/benefit analysis understand, it is a mistake to look at costs in isolation from benefits, or benefits apart from costs. Yet that appears to be the approach taken in these reports. In dealing with various objections to its reports, the IWG noted in its July 2015 response that “some commenters felt that the SCC estimates should include the value to society of the goods and services whose production is associated with CO2 emissions.” Their evasive response has to be quoted in full to be believed: “Rigorous evaluation of benefits and costs is a core tenet of the rulemaking process. The IWG agrees that these are important issues that may be relevant to assessing the impacts of policies that reduce CO2 emissions. However, these issues are not relevant to the SCC itself. The SCC is an estimate of the net economic damages resulting from CO2 emissions, and therefore is used to estimate the benefit of reducing those emissions.”

Hilarious. They say yes, they should include the benefits, but the SCC is so wonderful that it can be used all by itself … stunning.

60 thoughts on “The Bogus Cost Of Carbon”

If everybody checked their wallets, they’d know. How much has been wasted on 400-year old technology that’s unsuitable for grid power (wind turbines), subsequent increases in utility bills which disproportionately hits the poor? And let’s not mention billions in useless studies.

It always struck me as ironic that carbon-based life forms would poo-poo carbon. I have a feeling that there are millions of school children that DO NOT KNOW that they themselves are carbon-based. But they are taught to consider how they might reduce their “carbon footprint.” If they knew that the answer was to stop breathing and just go away, heads might, as you like to say, explode.

Of course they didn’t put down any benefits. They knew full well what the administration wanted and have seen what happens to those who disagree. The only right answer is the one that is ideologically correct. Sigh, few have read or recognize what Orwell or Rand wrote about the collective.

However correction needed: “That’s about 273 billion tonnes of emitted CO2 in the atmosphere. In addition, some 40% of the emitted total is sequestered, that brings emissions up to 450 trillion tonnes of CO2 At a claimed “cost of carbon” of $30 per tonne, that is $15 trillion dollars of claimed damages from CO2 … so … where are the corpses?”

Hi Willis
Congratulations with your blog!
As far as I know the definition of the SCC only applies to future emissions of CO2.
So if you emit one ton of CO2 now, what will be the future cost.
That would mean your example of past emissions and the cost of those wouldn’t count.
Maybe people like Ross McKitrick or Richard Tol can weigh in…
All the best
Marcel

Marcel, good to hear from you. I’m unclear why (other than inflation) the social cost of carbon would be different now from what it was in say 1920 … and most of the rise has occurred since then. Finally, even if say pre-1980 emissions had less social cost, instead of fifteen trillion in missing damages, we have only ten trillion ($10,000,000,000,000) in missing damages.

People don’t realize how big those missing costs of carbon are. Here’s how big a trillion dollars is. Suppose my ancestors had started a business in the year one, two millennia ago. And suppose we had huge losses. Suppose we lost a million dollars a day. A megabuck per day!

Here’s the thing. If that business lost a million dollars a day, day after day, month after month, year after year, decade after decade for over two thousand years and right up until today … that business would still not have lost a trillion dollars.

And if we’ve had ten times that much damage or even five times that much damage from historical emissions … where are the corpses? Show us the wrecked … whatever. Houses. Lives. Islands. Where is the damage?

Heck, at thirty bucks a tonne, current emissions are on the order of 9 gigatonnes of carbon per year as carbon dioxide. At $30 per tonne that’s two hundred and seventy billion dollars of claimed damage per year, each and every year. Forget about the past, where is the current damage?

And if the claim is that it takes time for the damage to become apparent, OK, but then the past emissions and past damages are suddenly valid again …

Finally, I’ve shown an ongoing benefit of around a trillion dollars per year in increased vegetable and fruit growth from ~ 450 gigatonnes of increased atmospheric CO2. That’s a mere two dollars of benefit per tonne … but it is a permanent and growing benefit. Think of the agricultural CO2 benefit as being the interest on the CO2 that’s been deposited in the air. At this point, the interest is worth a terabuck per year and that is big money.

And yes, I’d love to hear from either Ross or Richard Tol on this question.

Richard, thanks for replying. Even if we assume that the SCC went from $20/tonne in 1900 to your $100/tonne estimate currently, that’s still a massive historical cost. Given exponential decay, while the tail may be long we should have seen that cost already, not as theoretical estimates, but as records of lives ruined and people dead and climate migrants and the like. But where are the corpses? Where are the sunken coral atolls?

Look, the social cost of carbon is based on unproven estimates of feared future temperature rises. But the estimates of damage from temperature rise is wildly overestimated.

This is one area where we actually do have some data on the question. We’ve run the experiment on this question. According to the Berkeley Earth land temperature dataset, we saw the much feared 2°C temperature rise occuring over the last two centuries. So … where are the trillions of dollars of damages from that temperature rise? Where are the climate refugees from that dreaded 2°C rise?

In fact that 2°C temperature rise was generally beneficial to man and beast alike. Longer growing seasons to replace the harsh winters of the Little Ice Age. Northern harbors ice-free earlier and later. A huge reduction in temperature related mortality, since cold kills more than heat.

Given that we’ve done the experiment of the earth’s land temperature going up by a couple of degrees and there are few if any corpses … the idea of a $100 social cost of carbon is not supported by real damages from that known warming.

Above I gave estimates of the claimed historical losses given a constant SCC of $30 per tonne. If we assume a SCC of $20/tonne in 1900 to your $100/tonne today, that gives a weighted average (more recent tonnes) of around $75 per tonne.

So instead of $15 trillion in losses since 1900, by your figures we should have suffered $38 trillion in losses since 1900. As a result, I ask again.

Richard, this is the number which is in question. You are up at the top end of a variety of “scientific” estimates of this value. All of these are exquisitely sensitive to assumptions about future interest rates, to assumptions about what will happen to the planet in the next fifty years, and to scientific theories whose dire predictions have come to pass in the real world.

As a result, for you to baldly state that “the social cost of carbon” is some given value is merely a personal opinion.

Working on the assumption that CO₂ is a greenhouse gas, and that man’s emissions have led to a proportion of the warming seen in the C20th , then the benefits of warming, that even the IPCC acknowledge, must have a significant value which should be included under the benefits column.

It’s not really about any costs or benefits of carbon. It’s actually about creating another way for the government to suck more money out of the economy. Once you realize it’s about the money (and the graft that goes with it) everything makes sense.

For me, one additional piece of the puzzle was their only solutions to CAGW:
1) Give the government an unlimited new revenue stream they can increase, provide “help” for their friends and use the money as they see fit, to save us.
or we could…
2) Make billionaires out of Wall Street millionaires by trading worthless paper hedge funds that provide absolutely no benefit to taxpayers.(not unlike the mortgage crisis,eh?)

And while you’re at it waste as much money as you can on renewables.

If they would have said
“The government is reducing fossil fuel manufacturing to half its current level to save the world from CAGW”
I’d have worried my ass off. But no!

They said, “We’re going to piss away your tax money on stupid research and never let you see how we got our findings, all the while living good and helping ourselves to anything we want.”

[UPDATE 20 DEC 2016] From the Hoover Institute I find the following about the Social Cost of Carbon (SCC):

As all champions of cost/benefit analysis understand, it is a mistake to look at costs in isolation from benefits, or benefits apart from costs. Yet that appears to be the approach taken in these reports. In dealing with various objections to its reports, the IWG noted in its July 2015 response that “some commenters felt that the SCC estimates should include the value to society of the goods and services whose production is associated with CO2 emissions.” Their evasive response has to be quoted in full to be believed: “Rigorous evaluation of benefits and costs is a core tenet of the rulemaking process. The IWG agrees that these are important issues that may be relevant to assessing the impacts of policies that reduce CO2 emissions. However, these issues are not relevant to the SCC itself. The SCC is an estimate of the net economic damages resulting from CO2 emissions, and therefore is used to estimate the benefit of reducing those emissions.”
Hilarious. They say yes, they should include the benefits, but the SCC is so wonderful that it can be used all by itself … stunning.

Willis:
The social cost of carbon is an awkward term. Cost actually is net cost (costs minus benefits), and social actually is external. Technically, the social cost of carbon is better called the net external cost of carbon.

The benefits of carbon, that is the benefits of abundant and cheap energy, are mostly private.

Willis:
The social cost of carbon is an awkward term. Cost actually is net cost (costs minus benefits), and social actually is external. Technically, the social cost of carbon is better called the net external cost of carbon.

I showed above that as a result of the greening of the planet caused by rising CO2, there is about a trillion dollar per year net ongoing agricultural benefit. And this doesn’t even begin to address the other benefits of carbon.

In addition, commercial greenhouses show increased growth up to 800 ppmv, so we can expect this benefit to both continue and to grow in the future.

This means that the net present benefit of that already large and growing increase in the global output of food and fibre is immense.

In addition, there is a co-benefit. Stomatal size in plants is known to be related to CO2 levels—with higher CO2 levels these tiny openings covering the surface of the leaves can be somewhat smaller and still take in more CO2. This is important because the downside of stomata for plants is that they lose a lot of their precious water through their stomata.

So more CO2 means that in addition to plants growing larger, their water loss is reduced. Ask anyone who is farming irrigated land, and they’ll tell you that this is a huge benefit. Lower global plant transpiration also means that more of the rain ends up as groundwater rather than being hoisted out of the ground and lost by plants.

As a result, I strongly contest your claim that the SCC is a net external cost (cost minus benefits) of $100 per tonne.

The benefits of carbon, that is the benefits of abundant and cheap energy, are mostly private.

Mmm … not clear what you mean by this. Let’s take highways. Built on oil. Runs on oil. Are the benefits of having a national highway system a private or a public benefit?

This illustrates for me the underlying problem with what is generally called “monetizing externalities”. The problem is, where do you draw the line? I mean without the oil to run the machines that built the roads we wouldn’t have the roads. And a road network is undeniably a huge public benefit … is that an “external benefit” of oil? If so, why? and if not, why not? You say no, I say yes, or vice versa … there is no way I know of to say which of us is right.

Setting aside that fundamental and to me generally disqualifying objection to most attempts at “monetizing externalities”, it seems to me that you are arguing that the use of carbon based fuels is a NET LOSER in terms of external costs minus benefits. So let me ask you—when you say you’ve analyzed the net external costs (costs minus benefits), what are you counting (and not counting) as external benefits?

For example: claims of a net external cost of carbon is used to justify adding “carbon taxes”, cap-and-trade taxes, or other taxes and fees to carbon fuel costs. It is well established that rising energy costs hit the poor harder than the rich, and that there is no escape at the very bottom of the economic scale. Energy taxes are the most regressive taxes I know of. A single mom who has to drive to work and childcare and who is hit by rising fuel prices has less money to spend on her kids. Steven Chu didn’t face that problem when he called for US gas prices to go to $8 per gallon to match European prices.

Let me call this the “recursive social cost of carbon”, the social costs on single moms of taxes that are justified by claims of a high social cost of carbon … your claims of costs are based on the future. But the results of your claims are already hurting poor people today … is the cost to them of those claims an external cost?

And if not, since poor people are already paying that cost here in California due to Governor Moonbeam’s lunatic “renewable mandate”, why not?

Thanks again for presenting and defending your ideas, it is the foundation of science. Much appreciated.

First, private v social. The private costs and benefits of energy use (and hence CO2) emissions are reflected in the market price of energy. We do not need to worry much about these for climate policy (although we do need to worry about market power etc for energy policy). The external costs and benefits are the impacts unintentionally imposed on third parties through our energy use. That is something we need to worry about, and something that should be quantified.

Second, the social cost of carbon is a NET present value. It includes the positive and negative effects of climate change, carbon dioxide fertilization, and ocean acidification. It is a cost because most studies (not opinions) show that the negatives are larger than the positives.

Third, we do not observe that past impacts of climate change because we only observe the past with climate change; we do not observe the past without climate change. According to my research, the impact of the climate change observed for the the last century was net positive. That is, we are better off than we would have been had climate not changed.

Fourth, the climate change observed for the last century is small relative to the climate change projected for the current century. The same would be true for the impacts of climate change.

Now you’ve got me really confused. Are you saying that the social cost of climate change for the last century (which was a warming period) was not a cost but a net benefit?

I’ve read that your research also shows,controversially, that the next increment of warming will be a net benefit. So then shouldn’t the social cost of the carbon that is believed to be causing part of this next increment of warming be a net benefit, not cost, per your research?

First, private v social. The private costs and benefits of energy use (and hence CO2) emissions are reflected in the market price of energy. We do not need to worry much about these for climate policy (although we do need to worry about market power etc for energy policy). The external costs and benefits are the impacts unintentionally imposed on third parties through our energy use. That is something we need to worry about, and something that should be quantified.

Thanks for the reply, Richard. I understand that claim, which is why I replied with the example of reduced water use by plants due to increased CO2. It has global benefits in the form of increased groundwater retention and stretching scarce irrigation water which are imposed on third parties through our energy use. This is a huge public external benefit of oil, but I doubt greatly that you’ve included it in your analysis. You have not responded to that example.

And this points back to my underlying issue, which you also have not responded to. This is the question of how to draw the lines. I say the reduced water use by plants is an external benefit of carbon. Someone else, perhaps you, says it is not an external benefit. But there is no scientific way to decide which of us is right and which is wrong. If you look far enough, everything is related to everything else. You draw a line around part of that and claim that they are “externalities” … but where that line is drawn is purely a matter of opinion and choice. There are no scientific rules for where that line is drawn. And this, in turn, means that “monetizing externalities” is NOT part of science …

Second, the social cost of carbon is a NET present value. It includes the positive and negative effects of climate change, carbon dioxide fertilization, and ocean acidification. It is a cost because most studies (not opinions) show that the negatives are larger than the positives.

“Most studies”? So some studies show positives are larger than negatives … and you are arguing that this is a voting deal? Every study gets one vote, according to you, but since “most studies” are negative, you claim that the answer is negative?

That’s hilarious, Richard. The vast majority of people engaged in this unscientific enterprise of “monetizing carbon externalities” are alarmists who want to prove that the costs are huge. OF COURSE the majority of the studies show that … surely as a scientist you don’t find that significant? …

Third, we do not observe that past impacts of climate change because we only observe the past with climate change; we do not observe the past without climate change. According to my research, the impact of the climate change observed for the the last century was net positive. That is, we are better off than we would have been had climate not changed.

Huh? You say you can’t observe it … but you’ve measured it and it’s positive? I don’t understand how both can be true. What am I missing?

Also, you’ve subtly changed the subject. Before you were talking about the cost of carbon. Now, you’ve shifted to the social cost/benefit analysis of WARMING … a totally different question.

Fourth, the climate change observed for the last century is small relative to the climate change projected for the current century. The same would be true for the impacts of climate change.

Huh? Per Berkeley Earth land data, we’ve warmed two degrees over the last two centuries. We are talking about a POSSIBLE 2°C rise this century. While climate change in the past has been slower to achieve the 2°C, it is not “small” as you claim.

OK. Let me say that I strongly object to this approach.

1) You say you can’t point out where the actual current costs of carbon are occurring, which you say are $100/tonne * 10 gigatonnes carbon = 1 trillion dollars per year. How can such a huge cost be occurring and you can’t point out any corpses, or drowned cities, or millions of climate refugees?

Forbes magazine puts the current cost of all weather-related calamities at $250 billion per year … the IPCC says there’s been no overall warming-related increase in storms, floods, or the like … even if we totally contradict the IPCC and we make a ridiculous claim that half of that damage is anthropogenic, that’s still only a tenth of your claimed trillion dollars in damages. So where is the rest of the damage occurring?

2) You say you can’t point out where the actual past costs of carbon occurred either, because, well, something makes them invisible. I don’t understand what makes them invisible. But let’s take the most recent period 1990-2010, average emissions were about eight gigatonnes per year. According to you, the net external cost of those emissions is $0.8 trillion/yr * 20 yrs = 16 trillion dollars … but where are the victims of the dread carbon? Where are the trillions in costs actually occurring? On land? In the sea? Sixteen terabucks is a huge amount of money. Where are the damaged lives, the damaged houses and cities, that would add up to that number?

The claim is often made that these are future costs so we can’t see them today … but the warming is claimed to be the present warming. By that I mean, the costs are supposed to be related to the warming itself. Now warming has indeed been happening, 2°C in a couple centuries, but where are these huge costs that you claim are related to the warming?

3) You say you are relying on future costs, such as the claimed cost of “ocean acidification”. There will indeed likely be a slight neutralization of the ocean from CO2 over the next century. But neither you, nor anyone, can tell us what the monetary value of that is likely to be. It may be so small as to be unmeasureable. We simply don’t know enough about the ocean to even begin answering that question. Heck, we’re just beginning to understand that coral reefs regulate the pH of the water on the reef flats, and that pH varies more in twelve hours than the change predicted by 2100.

4) All of these alarmist future costs are predicated on the idea that no new energy sources come on line before the year 2100 … this seems quite doubtful.

Now, I’ve pointed out about a trillion dollars of actual annual current ongoing observable measurable scientifically based benefit of the increased CO2, that of increased vegetables, fruit, and fiber from higher atmospheric CO2 levels. We have satellites measuring the greening of the planet, and analyses that show that increased CO2 is the most likely cause.

And I’ve pointed out an unknown but large actual annual current ongoing observable measurable scientifically based benefit of the increased CO2, that of reduced plant transpiration resulting from higher atmospheric CO2 levels.

You, on the other hand, cannot point to one actual annual current ongoing observable cost and scientifically show that it is due to increased CO2. What you have are theories about possible future damage on the one hand, and curious claims as to why both past and present damage is invisible on the other hand.

Best regards, and thanks for explaining, discussing, and defending your ideas.

First: There are, of course, other externalities to energy, water being one. These should be estimated (and have been), and should be included in a regulatory assessment (and have been). But these should not be included in the social cost of carbon, which is the marginal impact of climate change. This is just a matter of definition.

Second: No apologies for most studies. Last March, there were over 1200 estimates of the social cost of carbon. Lots of disagreement on the size, little disagreement on the sign. There are indeed estimates that are partisan, but these are rare. My data are in the public domain, and you are free to redo my assessment:https://ideas.repec.org/p/sus/susewp/7515.html

Third: We cannot observe a counterfactual past, but we can model alternative pasts.

Fourth: Observed warming over the 20th century is about 0.7K. Projected warming over the 21th century is 1-3K. Pick the middle. Projected climate change is twice as fast as observed. If impacts are quadratic, should be 4 times larger in the future than in the past. It is worse than that, because many of the positive impacts of climate change saturate, whereas the negatives accelerate.

Richard, thanks for your reply. Let me repeat my conclusions from my last post, because you have not responded to them:

Now, I’ve pointed out about a trillion dollars of actual annual current ongoing observable measurable scientifically based benefit of the increased CO2, that of increased vegetables, fruit, and fiber from higher atmospheric CO2 levels. We have satellites measuring the greening of the planet, and analyses that show that increased CO2 is the most likely cause.

And I’ve pointed out an unknown but large actual annual current ongoing observable measurable scientifically based benefit of the increased CO2, that of reduced plant transpiration resulting from higher atmospheric CO2 levels.

You, on the other hand, cannot point to one actual annual current ongoing observable cost and scientifically show that it is due to increased CO2. What you have are theories about possible future damage on the one hand, and curious claims as to why both past and present damage is invisible on the other hand.

I have observations. You have theories, theories that have led nowhere, theories that have led to endless failed predictions. Predictions of huge temperature rises that have not materialized. Predictions of scary accelerations in sea levels that have not happened. Predictions of fifty million climate refugees by 2010 … where are they? Predictions of coral atolls going underwater, when measurements show that in fact they are either stable or growing in size.

So yes, Richard, IF we accept that there is an impending Thermageddon, and that sea levels will suddenly accelerate after thirty years of failed predications of acceleration, and that the fifty million climate refugees come out of the woodwork, and the atolls will sink in defiance of Charles Darwin, and then you take all of those imaginary costs and convert them to present values, you can get any number you please. Seriously, pick some assumptions, pick some things to leave in and leave out, pick a discount rate, and you can come up with any value for the “social cost of carbon”

Heck, you yourself list studies that give values ranging all the way from a net benefit to a cost of $1500 per tonne of carbon … sadly, you neglected to give the 211 individual results, but a third of them were $16 or under, half of them were under $29 … and on the other hand, ten percent of them were $243 per tonne or more, with the highest one over $1500.

This is what passes for science on your planet? A range from zero to fifteen hundred?

With results all over the map like that, I fear that you’re down to arguing how many angels can dance on the head of a pin. Is it $36 per tonne or $336 per tonneor $1336 per tonne? There’s no scientific way to say one is right or wrong.

So … I fall back on my comments at the head of this comment.

I’ve shown an ongoing trillion dollars per year in actual observable measurable benefits.

You’ve shown fists full of fanciful cost numbers ranging from $0 per tonne to $1500 per tonne based on a controversial theory which to date has produced little but failed predictions of doom.

No, Willis, you do not observe an impact. By definition, an impact is the difference between two states of the world, at most one of which is observed.

Richard, I just checked. As near as I can tell I never said you could “observe an impact”. In fact, I haven’t used the word “impact” in this discussion, and yet here you are lecturing me very sternly about my wrongness about impacts …

This is why I ask people to quote what they are discussing. It prevents your kind of straw man attack.

What I did say is that:

I’ve shown an ongoing trillion dollars per year in actual observable measurable benefits.

I hold to that. The satellites have observed the greening of the earth over a period of time, and the scientists that measured it say it is due to increased CO2. How is that not a measurable benefit?

And why do you think that of the many “states of the world” only one is observed? For example, at dawn it’s cold. We observe that. As the sun rises in the sky it warms the surface. If we measure the temperature at dawn and then at noon, we can calculate how much the sun has warmed the earth BETWEEN the two observed states of the world.

How is this not “observing an impact” of the sun? In addition to not using the word “impact”, I don’t understand your objection.

The paper has a link to a spreadsheet with the underlying data. There is a wide range of estimates of the social cost of carbon, primarily it is a derivative of forecasts of the future.

I understand that the COSTS are a “derivative of forecasts of the future”. My point is that the benefits I discuss are not anything of the sort. They are actual measurable changes in the environment.

Given that the benefits are measurable, but your costs are only theoretical guesses of the future AND are based on a theory which still has not produced good guesses about the future, I still say observation beats theory.

And yes, there is indeed a “wide range of estimates” of the SCC, in fact “wide range” hardy touches it. “Vast difference” is closer to the truth, since the estimated values of the SCC go from negative to more than $1500 per tonne … and every single one of the scientists who made those estimates is just as positive and as sure as you are that their own personal little estimate is the right one and the rest of the estimates are wrong, wrong, wrong …

You know what I think I’ll do, Richard? Rather than dispute this with you, I’ll leave the disputes to the experts. I’ll let you argue with the rest of them about things they never said. Come back and tell us when y’all have come to at least rough agreement on what the real number is, and we can discuss it further.

And since we all know that that proposed agreement on the SCC will occur on the twelfth of Never, perhaps you can see why I consider the SCC to be nothing but a huge anti-scientific wankfest. The scientific experts can’t decide on even a rough value or a probable range—the Government says $40 per tonne or so, you say $100, a third of the guesses (AKA “highly scientific estimates”) are below $16 per tonne, ten percent are above $243, the various estimates go from below the floor to way above the ceiling …

… and you think we should not only pay attention to this mystical theoretical totally subjective SCC number, which according to the experts is somewhere between minus zero and $1500 per tonne, but we should use it to make decisions that affect the global economy?

Seriously?

In any case, once the experts including yourself can agree on a number, I’m happy to continue this discussion. Until then, my thanks for explaining and defending your ideas, it is the mark of a true scientist.

Richard Tol wrote, “No, Willis, you do not observe an impact. By definition, an impact is the difference between two states of the world, at most one of which is observed.”

I read this morning that a safe and effective vaccine against the Ebola virus has been developed.

1. How long would it have taken to develop this vaccine (as well as those against Polio, Influenza, Rabies, Rubella, Tetanus, Typhoid and others) without the economic and human progress made possible by cheap and plentiful fossil fuel?

2. What is the economic value of those vaccines?

Neither is knowable but I doubt that anyone would want to return to a pre-fossil-fuel/pre-effective-vaccine age for any amount of money. And while neither is knowable some people think that they can foretell the future and put a dollar value on both the cost and benefit of carbon.

As one example of a SCC analysis that concludes that carbon is a net benefit rather than a cost, see this study which says inter alia:

Thus, our main conclusion is that the benefits of CO2 overwhelmingly outweigh estimated CO2 costs no matter which SCC estimates or assumptions are used.

When one scientist says the benefits “overwhelmingly outweigh” the costs, and another puts the net of the two at a cost of $1500 per tonne, you can be sure that we’re talking about that most settled of sciences, climate science … you can see why I am so skeptical of “monetizing externalities” in this field. It is almost entirely subjective as to what you include, what you exclude, what assumptions you make, and what discount rate you use. Given those you can, and scientists have, come up with just about any final value for the SCC.

In any case, using a complex crop-by-crop analysis this study puts the net benefit of the increase in ag production at over THREE TRILLION DOLLARS since 1961.

Note that I place no more trust in that number than in any other monetization of the externalities. I link to it merely to show that there is absolutely no agreement on the value or even the sign of the “social cost of carbon”.

Willis: That study does not in any way contradict previous estimates of the social cost of carbon. It just adds confusion by mixing up definitions.

You say it does not “contradict previous estimates “?? Those estimates contradict themselves! The one I quoted is just another contradictory estimate, that’s my point.

Richard, you seem to think that yours are the only correct “definitions”. Other people obviously have different definitions of the SCC. Heck, some don’t even include benefits in the SCC. And many, as you point out elsewhere, don’t include things like “biodiversity”, meaning the huge human benefit from the CO2 “greening” of the planet.

When the answers range from zero to $1500 per tonne, you have no room to lecture anyone about “definitions”.

“there’s no scientific way to say this externality should be counted and that one should not be counted”

Externalities are strictly defined in an Arrow-Debreu setting. Whether this is “scientific” or not depends on whether you consider mathematics to be a science or not.

No, whether that is “scientific” depends on whether you claim that the modern global economy is actually an “Arrow-Debreu setting”. Since such a setting requires perfect competition, convex preferences, and demand independence it is obvious that the global economy is not an Arrow-Debreu setting, as many economists have noted.

And in particular, Arrow-Debreu requires perfect competition for all goods in the system, meaning a perfect market with lots of purchasers for each commodity. In the world of SCC, that is definitely not true, as the various failed attempts at a “carbon market” have proven.

Heck, I even find someone saying that in an Arrow-Debreu setting, history itself can function as a “widespread externality”, viz:

Indeed, when the state of the economy affects future policy, it functions like a“widespread externality.”

So to summarize: your objection is falsified because an externality is obviously not as “strictly defined” under Arrow-Debreu as you’d like us to believe, and more importantly, because the SCC is far from an “Arrow-Debreu setting”.

Don’t try to baffle me with condescending bullshit, Richard. It doesn’t work often enough to be a useful tactic.

The theory is unambiguous: All externalities should be counted.

Some estimates of the social cost of carbon, by the way, include estimates of the impact on biodiversity.

You’re hilarious. Immediately after claiming that “all externalities should be counted” you point out that most estimates of the SCC do NOT include the impact on biodiversity … and since that’s the case not just for biodiversity but for a host of other “externalities” left out of various versions of the SCC, it means that in practice MOST SCIENTISTS PAY NO ATTENTION TO YOUR BOGUS THEORY ABOUT INCLUDING “ALL” EXTERNALITITIES.

And that is the very point I’ve been making. There is no scientific way, including an Arrow-Debreu analysis, to determine what to put in and what to leave out of an analysis which tries to “monetize externalities”. That’s why as you point out, Richard, the answers for the value of the SCC go from negative and zero at one end to $1,500 per tonne at the other end, Arrow-Debreu be damned …

Lets take an example. Some climate alarmists say that the inevitable warming that they say will result from increased CO2 will allow the “kissing bug” to spread north and south out of the tropics. This bug spread the disfiguring but usually not lethal Chagas disease.

So … should we include in the SCC the unknown global costs of the claim that an increase in CO2 MAY lead to a possible increase in global temperatures which MAY result in a migration of the kissing bug which MAY result in an increase in a disfiguring disease?

I say that whether you do an Arrow-Debreu analysis or not, there is no scientific answer to that question, and thats why we get answers from negative and zero to $1500 per tonne.

And when the answers are that far apart, you gotta know that you are no longer in the realm of science, you’ve wandered into the Kingdom of Advocacy …

Sorry, Willis, but you’re wrong: Externalities are a normative concept, not a positive one.

No one disputes that all externalities should be counted, in principle. In practice, however, “all” is too much, so we count those that we think are important. If you want to make the point that the current account of externalities is incomplete, you estimate the missing bits and submit your findings to a journal.

People have done that for biodiversity, and found that it is not terribly important for the social cost of carbon. Others disagreed, redid the analysis, and found roughly the same thing. And again.

Sorry, Willis, but you’re wrong: Externalities are a normative concept, not a positive one.

Richard, again I’ll politely request that you quote whatever the heck it is that you are babbling about. As far as I know, I did not say that externalities were either positive or normative. And as a result, I haven’t a clue what I said that you are referring to.

Now, all of those are things that people have seriously claimed are externalities of CO2. And according to you, you and other people think that ALL of those should be counted in calculating the externalities of CO2.

Me, I think that anyone who thinks that ALL of those should be counted needs to get a grip.

Here’s the problem. Many of these are only connected by the most tenuous of threads to CO2, and in fact may never happen. And many of these are nearly impossible to put a dollar value on. For example, we have three walrus-related claims of CO2 costs—walrus pups orphaned, walrus stampede, and walruses come ashore. We don’t know how closely related these are to CO2, perhaps not at all. But suppose it’s 100% true … how much is that worth? If you’re a walrus, it’s worth a lot. If you’re someone who lives off of walrus, it’s worth something, perhaps a lot. And if you live in Nebraska, it’s probably worth nothing.

So we have a long list of things with various strengths of connection to CO2, things which may or may not have an obvious value, and some of which have very different values to different groups. You’ve picked a few of them out, added them up, and gotten some number that by god you insist is the right number. Around $100/tonne.

But other people, all of whom you claim are valid, reasonable scientists, look at the exact same list and come up with costs from negative to zero to $1500 … and you want me to take you seriously?

I’ve given you real, measurable, observationally benefits of increased CO2. We’ve measured the increase in global greening from the satellites.

You’ve given me fantasies about what you think carbon dioxide MIGHT OR MIGHT NOT do at some unknown future time, complete with vague guesses about what those things MIGHT OR MIGHT NOT have as knock-on effects, the date on which said imagined knock-on effect MIGHT OR MIGHT NOT happen, and a discount rate that MIGHT OR MIGHT NOT match the actual future rate.

Despite all of your imagined terrible outcomes, as I said before twice and you have not denied, you do not have one single item that you can demonstrate has been damaged by CO2. Not one. All you have are your fears of the future and your calculator. You have no evidence that CO2 damages anything.

I’ve given you real benefits, you’ve given us your monetized fears of the future, and you want us to believe that your claims about the horrible terrible things that CO2 MIGHT OR MIGHT NOT do are either scientific, valuable, or monetizable?

Willis: You’re now mixing up multiple externalities with a composite externality. In any cases, all externalities and all components of each externality should be counted.

This, by the way, is a mathematical theorem. It is not an empirical regularity or a model that you may disagree with. You are, of course, free to try and disprove the theorem. You won’t succeed, by the way.

“Third: We cannot observe a counterfactual past, but we can model alternative pasts.”
I was interested in your use, or misuse, of that highly questionable art form (it cannot be classified as science, since the results of ‘modelling’ are rarely anywhere near observations – either hindcast or forecast: GIGO).

And Willis, I’m with you regarding your arguments. To my mind SCC is simply another way of screwing the populace for yet more tax money. Come on Trump, show us the way! Put an end to this ghastly pantomime.

Willis: You’re now mixing up multiple externalities with a composite externality. In any cases, all externalities and all components of each externality should be counted.”

Sir: since we do not know all the behaviors of the climate that might affect CO2, and do not know, and cannot know, all the effects that CO2 might have, and do not know all the causes of changes in the climate and how they might affect the behavior of CO2 or its effects, then there is no possible way to count “all” the externalities and all their components.

In other words, you have just proved that what you have set out to do, much like counting the individual atoms and molecules in the atmosphere, is something that cannot be done. The number you are counting is infinite and not subject to limits.

So you have just made a good argument that the SCC is a phantom number no matter how it is calculated. Any figure for SCC is merely another opinion of what one person or study group estimates “a” social cost of carbon might be.

Whatever you are using for definitions have not defined the problem. It might be wise to use conventional cost/benefit analysis where well-defined, known causes and effects are linked and measured.

It would appear that Richard is unable to answer any of Willis’s points of argument, since he has not. A load of sciencey jargon and deflection is unconvincing. But it was entertaining to watch. Thanks to both of you.

Second, the social cost of carbon is a NET present value. It includes the positive and negative effects of climate change, carbon dioxide fertilization, and ocean acidification. It is a cost because most studies (not opinions) show that the negatives are larger than the positives

The 11 estimates for 2.5oC show that researchers disagree on the sign of the net impact: 3 are positive, and 8 negative.

I’m sorry, but that is hardly probative. And once again you seem to think that science is decided by vote, and since the vote is 8 to 3, you say flatly of the SCC that “It is a cost.”

Fortunately, science is not decided by vote, and the fact that scientists cannot even decide on the sign of the SCC is clear evidence that the uncertainties go from the floor to the ceiling … which of course makes the SCC far less than useful.

Richard,
The calculated social costs of carbon are too uncertain to base rational public policy on. They are also subject to biases of the people doing the calculations. This is not remotely related to science, but closer to economics… thought a rather silly and useless economics. Should the arguments this thread exposes ever become a subject of broad public discussion (and imposing significant taxes tends to do that), you will lose the argument among voters…. pray that does not happen.